The Lloyd’s List Podcast: How to navigate the legal risk of carbon compliance

THE wave of carbon compliance acronyms heading towards shipping companies should not be news to listeners of this podcast. EEXI, CII, EU ETS – these should all be familiar terms as the industry prepares for a generational shift towards a net zero emissions industry. And yet, the detail of what these acronyms mean in terms of business practice and charter party changes is still not widely understood. Now that’s partly because in the case of the EU’s Emissions Trading System we still don’t know much of the detail, but that doesn’t make it any less urgent as a problem. The way in which shipowners and charterers negotiate charter party contracts needs and urgent review off the back of these regulations, not just in terms of the legal detail but the overall approach towards transparency and dialogue. The good news here is that there is the opportunity for a genuine step change in the way that the industry approaches these things. The bad news is that its going to be a difficult and probably quite expensive process of adjustment. So we have drafted in a lawyer to help. Helen Barden is one of the best in the business. As the senior FD&D specialist at North P&I she is well aware of the looming problems that need to be overcome. We wanted her view on the risks that need to be considered in preparing for an EU Emissions Trading Scheme that has not yet been finalised in the detail applicable to shipping. But the podcast starts with a more general view on what we need to be concerning ourselves with in terms of charter party changes, because although most owners feel they are prepared for EEXI and CII, there’s a lot of detail there that is likely going to result in a slew of legal challenges when things go wrong. Be prepared isn’t just a motto for the boy scouts you know!